To maintain ‘LONG’ positions on the FKLI, that is the call of the research house.
The FKLI attempted to climb above the consolidation phase yesterday but retreated strongly to close 4 points higher at 1,583.50 points. The index opened stronger at 1,582.50 points but then whipsawed between 1,578 points and 1,593 points before closing at 1,583.50 points. The latest session again showed the day’s low was higher than the previous session’s low, indicating increasing buying pressure. Furthermore, the FKLI also attempted to surpass the 1,593.50-point resistance before strong intraday profit-taking took place later yesterday.
In line with earlier expectations, the index will undergo a consolidation before propelling upwards – printing a “higher high” bullish pattern. Based on the RSI indicator of 54%, it is likely for the FKLI to continue its bullish momentum in the medium term. The research house reiterates that they are holding on to their positive trading bias unless the momentum reverses.
Hence, according to the RHB Research, traders should retain the long positions initiated at 1,567.50 points or the closing level of 16 March. To manage downside risks, the initial stop-loss threshold is revised lower to 1,566.50 points. The immediate support stays at 1,566.50 points – 24 February’s low – and followed by 1,545.50 points, i.e. the low of 11 March.
Conversely, the nearest resistance is eyed at 1,593.50 points – 17 March’s high – and followed by 1,620 points or 17 February’s high.
